(PA)
Construction is booming, auto sales are declining and property prices in central London are rising for the first time in five years as recent signs of the UK economy are heating up.
Today’s whirlwind of economic news is consistently positive, but the specter of inflation lurks in the data.
Construction orders have increased the fastest since April 1997, particularly in residential construction. The IHS / Markit CIPS index for May is 64.2, up from 61.6 in April, with any number above 50 indicating growth.
The increase in work on commercial projects was the strongest since August 2007, job creation reached its highest level since July 2014, and the use of subcontractors hit record levels.
Tim Moore of IHS Markit said, “UK construction companies reported another month faster production. Total orders rose the most since the survey began more than two decades ago, but supply chains have again struggled to keep up with the recovery in demand. “
It came as:
• House prices in prime London rose 0.3% in the year to May, the first increase since the Brexit vote. At Wimbledon, prices rose 9.4% for the year through May.
Tom Bill from Knight Frank said. “Things pick up where they left off after the December 2019 general election, and buyers can see good value after five or six years of falling prices.”
• With 156,737 vehicles sold, new car registrations rose by 674% compared to the previous year.
Seán Kemple of Close Brothers Motor Finance said: “New car sales are finally reaching pre-pandemic levels as the forecourts reopen and hopes for a solid economic recovery rise.”
• UK employers were hiring permanent staff as soon as they had been on record in the late 1990s.
The growth in the placement of temporary workers also reached a six-year high, according to the trade association Recruitment and Employment Confederation (REC) and KPMG.
Kate Shoesmith, REC’s Assistant Chief Executive Officer, said, “We have had a consistent picture over the past few months showing confidence is growing and hiring plans are on the move.”
The story goes on
However, inflation is a growing problem that is permeating almost all sectors at a rate that some have found worrying.
The construction and manufacturing industries are struggling with a shortage of building materials. There is a microchip crisis that is driving technology prices up.
Duncan Brock of the Chartered Institute of Procurement & Supply said there has been a “phenomenal acceleration” in construction, adding, “With goods and commodity inflation at a 24-year high, companies will fear profits will be eroded “. .
“Skilled labor shortages are also becoming a problem as recruiters have difficulty finding talented workers.”
Interactive Investor’s Richard Hunter said, “The welcome return to growth is being dampened by fears of rising prices as supply and demand continue to get out of whack.” Naismiths’ Gareth Belsham said demand had risen from “hot on white hot” .
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